Which states have the highest utility rates?

By Stacker

Published March 22, 2024 2:19 AM

Elena Photo // Canva

Which states have the highest utility rates?

row of residential gas meters on a brick wall

Planning for your new monthly utility bills might not be at the top of your list when searching for a new home. However, since utilities can play a major role in your monthly expenses, taking them into account while house hunting isn’t the worst idea. A lot of variables – including home size, your service provider, thermostat settings and the type of insulation in the home – factor into utility costs.

Another big factor, since the average cost of utilities by state varies significantly, is where your home is located.

Understanding average utility costs by state is a good way to do some smart financial planning and make sure you know what you’re getting into before and after buying a home. Rocket Loans takes a look at what utilities cost across the country.

What influences the average utility bill?

Climate plays a major role in utility costs. Common energy consumption like heating during frigid months and turning the AC up during the summer heat can impact utility or energy bills in a big way. Other factors you may not think of right away come into play as well, though. For example, population density is important to take into account because utilities cost more in areas where there’s higher demand.

That said, places such as Hawaii that aren’t as densely populated often have some of the highest costs because of their remote location. Building the necessary infrastructure for these places to get the utilities they need makes utilities more expensive, hurting a state’s rankings in the cost of utilities by state.

For this reason, some homeowners these days opt for energy-efficient appliances in their home, and in doing so may save money in the long run. Homeowners who want to improve energy efficiency in their house can finance the necessary additions using a home improvement loan or a personal loan.

Now that you know some of the factors at hand when determining average utility costs, let’s take a look at some of the most – and least – expensive places to live as it pertains to major utilities such as electricity and natural gas.

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Who has the highest utility rates in the U.S.?

table showing 10 states with the highest utility rates in the U.S

Several states have atypically high utility costs, which may be a result of these states having a disproportionately large amount of remote area, or it could be due to population density or other contributing factors. While each of these states certainly have good reasons for prospective buyers to call them home, consider how much you’ll be paying toward your gas and electric bill every month when making your final decision on whether to live there.

Also from Move.org, here are the states with the highest total utility costs, broken down by electricity and natural gas costs, organized with the highest state first.

As you can see, Hawaii has the priciest utility bills. Natural gas and electricity costs are high here due to the remote nature of the islands and the expenses associated with getting these critical resources to the people living there. All this adds to the state’s cost of living.

Don’t let this important information be lost on you if you’re thinking of moving to sunnier or more remote places.

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What states have the lowest cost of utilities?

table showing 10 states with the lowest utility rates in the U.S

When considering electric and gas bills, these 10 states are the most affordable, ranked by ascending total monthly costs, per Move.org. Keep these areas in mind if you’re looking to save on your monthly utility bills.

Affordable gas, a smaller population and an abundance of natural resources likely contribute to the lower gas and electricity costs for residents of the states in the table above.

Final thoughts

A decision on where to live shouldn’t be solely based on utility bills, of course. However, a better understanding of where you’ll pay the most for electricity and natural gas can help ensure that your decision won’t lead to big surprises when you get those bills every month. Be mindful of a state’s population, remoteness and access to natural resources as you get closer to your final decision.